The document discusses President Obama's proposal to extend middle-class tax cuts. It proposes extending tax cuts for families making under $250,000 per year. This would benefit 114 million middle-class families. Failing to extend the cuts would increase taxes by an average of $1,600 for each of these families. The plan aims to reduce the federal deficit by $1.16 trillion over 10 years by not extending high-income tax cuts for those making over $250,000 annually.

1. EXTENDING MIDDLE-CLASS TAX CUTS
IT’S THE RIGHT THING TO DO
The President has called on Congress to act now to extend middle-class tax cuts and to not hold our economy
and the middle class hostage over additional tax cuts for families making over $250,000 a year.
P R E S I D E N T O B A MA’ S PRO POSAL TO EXT EN D M IDDL E-CL ASS TAX CUTS
PROPOSED BY PRESIDENT OBAMA PASSED BY THE SENATE PASSED BY THE HOUSE SIGNED BY THE PRESIDENT
JULY 09, 2012 JULY 25, 2012 AWAITING VOTE AWAITING BILL
CONTINUING TAX CUTS FOR 98 PERCENT OF AMERICAN FAMILIES
President Obama’s plan will make sure the 98 percent of American families with incomes of less than $250,000 continue
to fully benefit from the income tax cuts that are set to expire at the end of 2012.
LOWER TAX RATES ON THE
FIRST $250,000 OF INCOME
AMERICAN OPPORTUNITY
AFFECTING
TAX CREDIT
114 MILLION Families will continue getting
MIDDLE-CLASS FAMILIES help to pay for college
AFFECTING
11 MILLION
FAMILIES
MARRIAGE DOUBLED CHILD TAX CREDIT
Couples will not be penalized with Families will continue receiving a
higher taxes because they file jointly Child Tax Credit worth $1,000 per child
AFFECTING AFFECTING
38 MILLION 35 MILLION
COUPLES FAMILIES WITH CHILDREN
Under the Republicans’ tax proposal, 25 million families that make less than $250,000
would see their taxes go up by an average of $1,000, while families making more than $1 million
would get tax cuts worth an average $160,000.
ELIMINATES REDUCES ELIMINATES
American Opportunity Tax Credit The Child Tax Credit available to low‐ The Earned Income Tax Credit increase for larger families
that helps families pay for college and moderate‐income working parents and would reduces the credit for many married couples
The 2 percent of families who would see
additional tax cuts under the Republican plan
have an average income of $800,000.
CONTINUING TAX CUTS FOR 97 PERCENT OF SMALL BUSINESSES
President Obama’s plan would continue tax benefits that benefit 97 percent of small business owners.
He’s also proposed two new tax credits to help businesses hire and grow.
CONTINUE NEW
EVERYONE, INCLUDING THOSE WITH INCOMES IMMEDIATE WRITE-OFFS FOR NEW INVESTMENT
OVER $250,000, WILL ALSO BENEFIT FROM Lets firms continue to claim immediate tax write-offs for
new investment through 2012, putting an additional $50
Lower tax rates on the first
$250,000 of income billion in the hands of businesses in 2012 and 2013
Marriage penalty relief
NEW
Tax deductions for up to
$250,000 of new investment A 10 PERCENT INCOME TAX CREDIT FOR
FIRMS THAT HIRE MORE WORKERS OR
INCREASE WAGES
The credit is capped, which helps target its benefits to
smaller businesses
The 3 percent of ‘small business owners’ who would not get continued tax cuts on their
income above $250,000 include high-income professionals and individuals who receive
income from businesses that have no employees.
18 TAX EXAMPLES
CUTS Wealthy individuals whose “small business” is renting out
their vacation home or other property
Law firm partners, hedge fund managers and other
Since taking office, the President has highly compensated professionals who organize their
signed into law 18 tax cuts that help small businesses as partnerships.
businesses grow, hire, and invest
REDUCING THE FEDERAL DEFICIT
The President’s proposal will save almost $1.16 trillion over the next decade.
$191 BILLION $1.16 TRILLION IN SAVINGS
$119 BILLION Interest savings
Reinstate the $7 million per-couple
estate tax exemption, which exempts all
but the wealthiest 3 in 1,000 decedents
from tax
Making the high-
income tax cuts
$849 BILLION permanent would add
Ending tax cuts on income almost $1.16 trillion
over $250,000 to deficits over
the next 10 years.
SURPLUS +
$0
DEBT -
Source: The President’s FY 2013 Budget
NUMBER OF AMERICAN FAMILIES FACING A
TAX INCREASE IF CONGRESS FAILS TO ACT
On January 1, 2013, taxes are scheduled to go up for 114 million middle class families by an average of $1,600.
500K
2.5M
300K
400K 500K
300K
2M
1.4M 2.5M
2.2M
500K 300K 7.3M
200K 3.7M 400K
1.1M 4.9M
1M 700K 1.4M
2.4M 4.3M
900K 4.8M
1.9M 3.4M
600K
1M 2.9M
13.2M 1.5M
2.1M 300K
3.3M
2.3M
2.2M
2.1M 700K 1.3M 1M
500K 1.6M
1.7M 3.5M 300K
1M
8.7M
1.6M
The average
7.6M
tax increase
300K would be
$1600
# M I D D L EC L A S S TA XC U TS L E A R N M O R E AT W H I T E H O U S E.G OV/ TA X E S
August 09, 2012